DRAM prices to rise by 5% – 10% in the third quarter

Although the price of dynamic random access memory (DRAM) remained rather stable in the recent months, it will increase by 5 – 10 per cent in the third quarter, according to Mark Newman, an analyst with Bernstein Research. Nonetheless, a good news is that the industry will likely move to longer-term pricing, which means that the market will be more stable.

Contract price for a 4GB DDR3 module was set at $30.5 on average in April and has not changed since then. Moreover, it will remain on that level in the second half of July as well, according to DRAMeXchange. However, spot market DRAM prices have been gradually increasing in the recent months: on Friday the spot price of one 4Gb 1600MHz DDR3 chip was $4.309 at DRAMeXchange, up from $4.126 in mid-May.

PC manufacturers traditionally start to accumulate dynamic random access memory for PCs that will become available during the back-to-school season in June and July, which is when prices will further increase amid growing demand.

“PC DRAM contract prices were reported flat in 2H June and are widely expected to start increasing in July, said Mark Newman in a note to clients today, reports Tech Trader Daily. “The spot price currently is 22% higher than the contract price for 4Gb PC DRAM. We expect a 5%- 10% PC DRAM contract price increase is highly likely in Q3.”

While the DRAM market will likely become more stable thanks to consolidation of memory manufacturers, actual prices will now depend mostly on suppliers, the analyst believes.

“As the DRAM industry is moving to longer term pricing, pricing is becoming more stable and supplier’s pricing leverage is increasing given the fundamental supply constraints at play,” said Mr. Newman.

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KitGuru Says: Keeping in mind the increase of corporate PC purchases, actual demand for DRAM may be higher than expected, so the prices will grow more significantly than is currently believed.

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